Single Payer Health System Dies in Vermont

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For the last few years, universal health care advocates watched Vermont with hopeful eyes as the Green Mountain State attempted to become first in the nation to adopt a single payer health care system.

The prospects for universal, publicly funded health care in the rest of the country were slim. But in the progressive state of Vermont, health policy wonks saw a hint of possibility. Gov. Peter Shumlin, a liberal Democrat, centered his entire agenda on implementing a single payer system.

For years he worked to get a framework passed through the state legislature. When he succeeded in 2011, Vermont attracted attention from health experts nationwide who saw the program’s potential as an experiment that could lead to a national trend toward single payer.

WHY THIS MATTERS

If the progressive state of Vermont couldn’t get single payer to work – chances are slim other states will even attempt to do it. Yet some business council members applauded the move, saying their health care costs would have skyrocketed by 60 percent or more if the plan had moved forward. “It would have been a lose-lose,” one business owner said.

But those possibilities came to a screeching halt this week when Shumlin regretfully conceded he was giving up on the program saying it would cost the state far more than it could afford.

“I am not going to undermine the hope of achieving critically important health care reforms for this state by pushing prematurely for single payer when it is not the right time for Vermont,” Shumlin said in a statement on Wednesday.

The legislation approved in 2011 was only a framework. It required the governor to come up with a way to pay for the so-called Green Mountain System. Several estimates suggested the single payer system would cost $2 billion each year.

After missing several deadlines, the administration finally completed its model and discovered that funding the program would require serious and potentially disastrous tax hikes.

Those hikes included an 11.5 percent payroll tax on businesses and an income tax (separate from the state’s current tax) of up to 9.5 percent. The governor said he was concerned that both taxes would disproportionally hit small businesses.

“These are simply not tax rates that I can responsibly support or urge the legislature to pass,” the governor said. “In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.”

To make matters worse, Shumlin said the state would get far less financial assistance from the federal government than Vermont originally expected. Under the plan, the state would also lose out on about $150 million Medicaid dollars.

Shumlin’s announcement was a blow to single-payer advocates who have been rooting for Vermont to blaze the path in implementing universal health care in the U.S. The common thinking was, if single payer was going to happen anywhere anytime soon – it was going to be in this consistently blue state. “Health care is a right, not a privilege,” Shumlin said in April 2011 shortly after he took office as governor. Vermont participated in Obamacare during the effort toward single payer.

“The governor’s misguided decision was a completely unnecessary result of a failed policy calculation that he pursued without Democratic input,” the group said in a statement.

Speaking to reporters at a press conference Wednesday, a defeated Shumlin called single-payer “the greatest disappointment of my political life so far.” Shumlin took office as governor in January 2011 and also serves as chair of the Democratic Governors Association.